A spokesman with the federal police in Mato Grosso do Sul state said the Guarani-Kaiowa indians say the water courses through sacred land. The investigation started Tuesday.
The Guarani-Kaiowa uploaded a video to YouTube showing a stream covered in dense white foam. They said in a statement they were "shocked and indignant with the cruel actions of farmers."
The Guarani-Kaiowa are embroiled in a land dispute with ranchers who claim the 2.5 acre plot they occupy. Last month, a judge allowed the 170 indians to remain.
The Indigenous Missionary Council says three men from this tribe were killed since 2009. One man bearing signs of torture was dumped in the creek.